The software solution: Returns management solutions take the surprise out of handling returns

By Bob Trebilcock, Editor at Large -- Modern Materials Handling, 5/23/2006

Visibility is one of the biggest problems associated with returns. If you don’t know what’s coming at you, you can’t plan to handle it when it arrives. “Most supply chain execution systems optimize forward logistics,” says Lee Norman, a senior manager with ClearOrbit (800-324-5143). “They don’t optimize returns. So, everything is done ad hoc.”

Returns management software solutions can automate the process. These systems perform five functions.

The first is gate keeping: Returns management systems provide a Web-based tool that provides the customer with the labeling and shipping information to send a returnable item back.

The second is process management: The system determines what’s coming back, how it’s coming back and where it’s going to be sent. That visibility allows a facility to plan to handle the return.

The third is receipt: Returns management interfaces with a warehouse management system and makes sure there are rules in place to optimize the flow of returns. When an operator scans a return label at the dock, the system knows how they should be handled.

Disposition comes next: That is determining whether the return needs to be repaired, remanufactured or repackaged, whether it can go directly to another customer and whether it has to be scrapped.

Finally, the system provides the information necessary to issue a credit and reconcile a customer’s account.

Why should an enterprise invest in a returns management solution? “For companies looking for the next cost containment opportunity, returns is ripe for improvement,” says Norman.